Exciting sustainable city innovations around the world
Cities are at the heart of national and global growth. In an increasingly urbanised world, cities are both the source and the solution of many global problems. Not only do urban areas account for over half of the world’s population, but they also generate around 80% of global Gross Domestic Product (GDP). Cities, however, are confronted and challenged to become inclusive, safe, sustainable and: smart. And because of its impact, one could say that the battle for sustainability will be lost or won in cities. Cities play a major role in achieving Sustainable Development Goals (SDGs). They clearly play a role in SDG 11 – sustainable cities and communities – but cities also impacts many other SDGs.
We have a long way to go and little time: cities are becoming more sustainable yet to reach our goals, cities much embrace more and also more radical innovations. Those radical innovations mean moving away from the conventional way of thinking and designing.
Zwolle, the Netherlands
Across the globe, we can encounter many inspiring examples of how to redesign our cities, simply by taking this other perspective. Let’s start in the country I was born, the Netherlands, and zoom into the small city of Zwolle. Here, for instance, the plastic road was invented and created. A new modular bicycle path made from recycled plastics. It matches up to the equivalent of 218.000 plastic cups. So you cycle on waste! The road has higher longevity than conventional surfaces, can withstand extreme temperatures and it can be applied to parking lots too. No virgin materials are needed and we have lots of (plastic) waste we need to dispose of.
Hygiene and water are huge challenges in low-income cities, mostly in developing countries. So let us move to Lima, the capital of Peru. An interesting innovation, X-runner, brings an appealing waterless sanitation solution for those who lack access to conventional toilets. With a simple subscription to a pick-up plan, households receive a waterless, resource-separating toilet combined with a weekly service that collects waste directly from the home. Imagine the impact on health in poor slums where people suffer tremendously from diseases due to lack of water, sanitation and hygiene.
Mexico City, Mexico
Smog and air pollution is a huge problem in many cities like Mexico. The Torre de las Especialidades found a solution by creating a ‘smog-eating’ front for its hospital, absorbing the pollution from the air. The new hospital building in Mexico City is designed to transform air pollutants into harmless chemicals. The building has a facade made up of a new type of tile called “proSolve370e” which, according to its inventors Elegant Embellishments, can neutralise the chemicals produced by 8,750 cars every day.
The city of the future will combine sustainable initiatives with the use of ICT and advanced technologies. Around the 1990s, as the digital revolution came up to speed, it was often assumed digitalisation would mean the death of cities but the opposite is the case. Smart, intelligent cities, that have sustainability at the heart of development, are considered to be a great place to live. Digital innovations can thrive, although they still have too little scale around the world. A great example is to be found in Cambridge, Massachusetts, which we can describe as an internet of pipes. A team of MIT researchers have developed a system to collect and analyse biochemical information from sewage water, which could be thought of as a ‘smart sewage platform’. The project is called Underworlds and it is being tested at this time.
The line of thinking about smart, sustainable cities is to use everything there is in a city in a smart and multifunctional way. This also implies to ‘simples poles’. The Array of Things (AoT) is an urban sensing project, a network of interactive, modular sensor boxes that will be installed around Chicago to collect real-time data on the city’s environment, infrastructure, and activity for research and public use. AoT will be measuring factors that impact liveability in Chicago such as climate, air quality and noise.
Everywhere around the world we can find pertinent examples like these. Since the world by now has become a global village; we can share all these examples and the knowledge behind them to transform cities into the best sustainable, smart cities they can be.
What’s Causing the Global Supply Crunch?
As the global economy gradually recovers from the impact of COVID-19 pandemic, worldwide supply crunch is intensifying, spreading not only from one country to another, but also from one industry to another.
A year ago, when the pandemic continued to spread, economies around the world were severely hit and there was panic buying among consumers. Today, it is companies that are trying to go on a stockpiling, buying more raw materials than they need to keep up with rapidly recovering demand. The panic buying is fuelling more shortages of raw materials, including copper, iron ore, steel, corn, coffee, wheat, soybeans, wood, semiconductors, plastics, cardboard, etc. As a result, inventories of seemingly every raw material around the world are running low. “You name it, and we have a shortage on it,” Tom Linebarger, chairman and chief executive of engine and generator manufacturer Cummins Inc., said earlier, and he noted that his clients are “trying to get everything they can because they see high demand”.
Supply shortages have driven prices up significantly, with the impact of rising prices for some key raw materials being significant. The prices of various industrial raw materials such as crude oil, plastics, and chemicals are rising. Some of the impacts of higher raw material prices have already begun to be reflected in consumer goods. Reynolds Consumer Products Inc., the maker of the namesake aluminium foil and Hefty trash bags, is planning another round of price hike, and this will be the third for the increase this year alone. Food prices are also climbing. The price of palm oil, the world's most consumed edible oil, has risen more than 135% over the past year to record levels; soybeans have topped USD 16 a bushel for the first time since 2012; corn futures prices have touched an eight-year high, and wheat futures prices have risen to the highest level since 2013.
Changes in factory orders due to the impact of the pandemic have also tightened supply in some markets and pushed up prices for raw materials. Some knitting enterprises in Dongguan, Guangdong, said that affected by the pandemic, about 40% of the orders have come back to China from countries such as India and Southeast Asian countries, while the factory utilisation rate has increased by about 30% to 40%, and now it has reached 100%. In Jiangyin, Jiangsu, a bedsheet enterprise adjusted its production capacity to accommodate a USD 20 million order from Southeast Asia. Increased demand from the textile industry has led to tight supplies of raw materials. In Wujiang, Jiangsu, where polyester filament yarn is the most in demand, the shortage of raw materials this year has been unexpected, especially in the current off-season, when there is not much stock. In Suzhou, also in Jiangsu, the export of polyester filament yarn increased by nearly 60% from January to April, while the price increased by 40% to 60%. Compared with the same period last year, the price of filament yarn increased by RMB 2000-3000/ton.
Remarkably, this hoarding frenzy is pushing global supply chains to the brink of collapse. Inventory shortages, transportation bottlenecks, and price increases are nearing critical levels, raising concerns that strong global growth could fuel inflation. The supply disruptions in the past are simply incomparable compared to the severe inventory crunch of 2021. Industry insiders predict that both large and small enterprises will be affected by this supply shortage.
Why are current supply shortages so acute?
Researchers at ANBOUND believe that instead of having one single factor, there are multiple reasons for the emergence of complex systemic problems.
First of all, there is the recovery in demand as the pandemic is brought under control. This year, as vaccination rollout efforts have brought the pandemic significantly under control in the United States and some European countries, the economy has begun to show significant momentum for recovery. This trend prompted a near-simultaneous recovery in most markets around the world. The collective recovery of global markets has led to a near-simultaneous increase in demand, exacerbating the mismatch between supply and demand. In the case of commodity futures, the capital was collectively bullish on commodities under such expectations, significantly driving up the prices of commodities (mostly upstream commodities) and spreading to midstream and downstream commodities. It should be noted in particular that the surge in demand for certain specific commodities under the pandemic has also exacerbated the supply-demand mismatch in some industrial chains. For example, the increase in the need of remote, online working and studying has increased the demand for all kinds of electronic products, leading to a surge in global demand for semiconductor chips, which affects several chip-requiring industries.
Another reason is that the pandemic has disrupted the global supply chain system, causing distortions in supply and demand in certain industries, which are transmitted along the supply chain, causing a wider supply crunch. As ANBOUND previously pointed out, the spread of the pandemic has dealt multiple blows to global supply chains. During the pandemic, China, as the "world's factory", was affected by the pandemic and its production side was disrupted. Then, the demand side of developed countries was suppressed by the impact of the pandemic. This is followed by the fact that the malfunctioning of the global supply chain system has exacerbated global supply distortions. To cite an example, the severe shortage of containers due to disruption of the supply chain has exacerbated the global supply distortions.
In addition, enterprises began to collectively increase their inventories, leading to the increase of inventories in the industrial chain and supply chain, amplifying the demand for all kinds of raw materials, intermediate products, and supporting products. In the past, in order to save costs and improve efficiency, many enterprises advocated zero-inventory production and tried to reduce the inventory in the production link, thereby reducing the capital occupation. However, the smooth operation of zero inventory production depends on the efficient global supply chain system. Once a problem occurs in the global supply chain system, it can lead to chaos in the whole supply chain system. The 2011 earthquake in Tōhoku, Japan has caused the shutdown of some key auto parts plants, which once led to the global auto supply chain being affected. Likewise, the global spread of the COVID-19 pandemic since last year has damaged, distorted, and even disrupted global supply chains.
Finally, geopolitical factors have also contributed to the tight supply of global commodities, resulting in the artificial disruption of part of the industrial chain and supply chain. For example, the U.S.-driven crackdown on chip supply to Chinese enterprises and related sanctions have seriously disrupted the global semiconductor industry chain.
How long will the supply crunch last?
Overall, the global supply crunch is due to a variety of reasons, including increased demand from the post-pandemic economic recovery, distortions in global supply chains caused by the pandemic, collective stockpiling by enterprises around the world, and geopolitical disruptions. However, this does not represent a significant expansion of aggregate global demand, but rather a distortion of the existing system as it is disrupted and broken. Judging from the current situation, this tight supply situation will last for a long time, leading to the price rise of raw materials and components. Therefore, both enterprises and governments need to be prepared for this scenario in the medium- and long-term.
Mr. He Jun is Partner, Director of China Macro-Economic Research Team and Senior Researcher. His research field covers China’s macro-economy, energy industry and public policy.